Adnoc awards Eni 25% stake in multi-billion dollar gas concession
The Abu Dhabi company is seeking other foreign partners to take up a 15 per cent stake in the ultra-sour gas project
Abu Dhabi National Oil Company awarded Italian Eni a 25 per cent stake in a multibillion dollar gas concession, the first ultra-sour gas offshore project since the emirate announced a Dh486 billion plan to achieve self-sufficiency.
Eni will contribute 25 per cent of the cost of developing the 40-year Ghasha concession, which includes Ghasha, Dalma, Hail and other offshore fields that are sour, Adnoc said on Tuesday.
Sour gas fields contain a high level of sulphur that needs to be extracted to produce gas for consumption. Adnoc is in talks with other potential foreign oil and gas companies to award the remaining 15 per cent stake, with the state-owned producer retaining a 60 per cent holding.
“Development of our Hail, Ghasha and Dalma ultra-sour gas offshore resources, at commercial rates, will make a significant contribution towards delivering that strategic imperative and bringing forward the day when the UAE will not only be self-sufficient in gas but also transitions to net exporter of gas,” said Dr Sultan Al Jaber, Adnoc Group chief executive.
Latest from Adipec
“At the same time, it will enable further optimisation of costs and ensure we extract the maximum value from our gas resources, as we continue to partner with those who share our values and contribute to our growth strategy.”
Earlier this month, Abu Dhabi’s Supreme Petroleum Council approved a Dh486bn five-year capital expenditure plan to unlock its sour gas caps and boost its oil output capacity to 5 million barrels of oil per day by 2030, from about 3 million bpd currently. The company plans to raise output capacity to 4 million bpd by 2020.
Abu Dhabi also announced it had found 15 trillion cubic feet of gas in existing and untapped block. The discoveries would add 7.1 per cent to existing reserves of gas, which stood at around 209.7 trillion cubic feet at the end of 2017, according to the latest BP Statistical Review of World Energy.
The Ghasha concession, which will tap ultra-sour gas caps in the Arab basin, holds multiple trillions of standard cubic feet of recoverable gas, Adnoc said.
The development will produce more than 1.5 billion cubic feet of gas per day when it comes on stream by the middle of the next decade.
The concession could produce gas that will provide electricity to more than two million homes when complete, and will also produce more than 120,000 bpd of condensate, as liquid that fetches higher value than normal crude because it is easier to process into by-products.
This is the second contract Adnoc has awarded to Eni, the first Italian oil and gas company to win a concession in Abu Dhabi.
In March, Eni was awarded a 10 per cent stake in Umm Shaif and Nasr concessions and a 5 per cent interest in Lower Zakum.
Special report: Oil & Gas 4.0
Updated: November 13, 2018 06:16 PM